Big telecom pushes for telco deregulation bill in California

California may be the most recent state to enact a law that significantly slows the regulatory oversight of telecommunications services in the state, delivering an important victory for the industry players who have lobbied for the passage of the law.

On its face, SB 1161 seems fairly simple. The text of the Act explains that it only seeks to "preserve the future of the Internet by encouraging continuous and technological investment moves" and "support the constant consumer choice." But to achieve that, the measure would gut the regulatory authority of the California Public Utilities Commission, a key oversight body of the state, on many of the technologies of Internet-based communications.

What it means: would California customers no longer have an official regulatory body to address their concerns on the quality and affordability of these new, emerging services, which would not be forced to the same protections of consumers that apply to traditional telephone systems, based on cable. To date, the Commission has not stated a strong intention to regulate this growing sector of the communications industry. By preventing from doing so in the future, critics say, SB 1161 addresses a problem—an overeager regulatory commission—that does not exist.

Consumer advocates argue that SB 1161 would bar the CPUC from keeping close tabs on telecommunications companies big as AT&T and Verizon - two of the great sponsors of the law - and the safeguarding of customer protections. Supporters, meanwhile, say that the CPUC and any regulations that could only pass will hinder the technology industry and job creation. Proponents such as the columnist Larry Downes and technology industry analyst say that Governor Jerry Brown should quickly sign SB 1161 to law and to begin reversing the authority of the Commission, whose budget has increased by $300 million last year.

The State Assembly and Senate passed the Bill at the end of August. Now, Governor Brown has until September 30 to decide whether to sign the measure into law.

In California, the telecommunications industry has joined forces with Silicon Valley as Fabiola Carrión, a broadband analyst with the progressive States network, explains. Technology trade groups in Silicon Valley, including TechAmerica, TechNet and the Silicon Valley leadership group, launched a fact sheet arguing that SB 1161 would clear the path of costly regulatory barriers. SB 1161, reportedly in a joint Web page urging Governor Brown to sign Bill, cleared the road of "protracted regulatory procedures that create delays and unnecessary costs".

Cadre of SB 1161’s deep pocketed supporters include telecommunications companies such as AT&T, Comcast, Time Warner Cable and Verizon and groups of trade representing the technology sector. According to an analysis by Map Light, a public interest group, which tracks the influence of money in politics, state senators received nearly 11 times as much in campaign contributions from interest groups that support SB1161 than from those who oppose it.

Entering the number four on the list is Senator Alex Padilla, the Los Angeles Democrat who introduced SB 1161 and who has chaired the energy, utilities and communications since 2008 Committee. Data compiled by Influence Explorer shows that the telecommunications industry has taken care of Padilla since he was first elected to the assembly in 2006. From 2006 to 2010, Padilla received little more than $109,000 of telephone utilities and telecommunications services and equipment industry, including a number of significant donations from executives at AT&T and Verizon.

Almost 80 percent of those contributions came from AT&T, the California Cable & Telecommunications Association, Comcast, Verizon, Time Warner and Verizon Wireless, and executives of the companies - all of which support SB 1161. Padilla also received $5,000 from CALTEL during the same period. CALTEL initially supported the draft law, but later abandoned their support. Padilla Office did not respond to a request for comment.